Archived posting to the Leica Users Group, 2004/09/25

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Subject: [Leica] Re: new 1ds mark II
From: bdcolen at (B. D. Colen)
Date: Sat Sep 25 07:34:10 2004

You may well be correct when you state that a company selling a product
at cost is losing money - but let's get real here for a minute: Leica
has been losing money on the R for several years; so apparently they're
willing to take some losses. As I said, I may be way off on this, but I
think selling the digital R back at cost would definitely make it what
is called a loss leader - take a loss on a given product inorder to
bring customer into the store to sell other merchandise at substantial
markups. ;-)

B. D.

-----Original Message-----
[] On Behalf Of
Sent: Friday, September 24, 2004 7:26 PM
Subject: [Leica] Re: new 1ds mark II


>I realize that there are development costs, etc. But I wonder...What do

>you suppose would happen if Leica offered that back at cost? That's 
>right - at cost? Let's suppose that the back COSTS $1500 to produce. 
>Suppose they sold it for $1500, which would allow any Leica R owner to 
>get into high quality digital for $1500. And would allow anyone else to

>get into high quality digital AND Leica for the $1500 plus the cost of 
>a used R8...How many R bodies would Leica then sell? How many R lenses?

>I'm no business man, but I'll bet they would make allot more money in 
>the long run selling that thing at cost, bringing new Leicaphiles into 
>the Leicatent  than they'll ever make selling it at 4K plus...

If a company sells a product at cost, it's losing money.  You can't
break eve by selling at cost.  There are costs for transporting and
storing product.  There are warranty costs with fixing bad units.  There
are personnel costs in selling the product.  Leica isn't a large
company.  If they start losing money on every sale (but make up for it
in volume! :), they're going to be in trouble. let's give them some padding to account for their costs of
selling the product, but don't give them any profit.  Next, the dealers
need to make a profit.  Pretty soon, even without amortizing R&D costs
and still without making a profit on the initial investment, the price
of each back is going to be over $3k...assuming it costs $1500 to make.

Perhaps the digital back could be bundled into a package so that Leica
and the dealers make an overall profit, but the package could be cheaper
than buying the pieces individually.  That's still not going to be price
competitive with Canon's offerings.

While I'd love to be able to pay $1500 for a back to make my M digital,
I don't see it happening anytime soon.  And based on the problems the
initial M6TTL models had with batteries draining, I'm not going to be
the first to get in line to buy a high-tech product from Leica.  Their
glass is wonderful beyond question.  They have not proven themselves to
be capable high-tech engineers.  I'm hoping that changes.  I'll get out
of line and let others go first, though.  :)


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In reply to: Message from ericm at (Eric) ([Leica] Re: new 1ds mark II)